How important is a Variable Annuitys Insurance Company Rating
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Financial Planning - Financial planning in general. (Moderated) 

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How important is a Variable Annuitys Insurance Company Rating pal123 08-09-2007
Posted by joetaxpayer on August 10, 2007, 11:49 am


Percy.Labrada@Gmail.com wrote:

> Yes I have maximized all other vehicles available to me. This money
> is what is left over from that. It is important to note that I am NOT
> a "buy and hold" invetsor. Every so often, I make changes to the
> portfolio which would trigger capital gains taxes.

If the 'every so often' is less than 1 year, and you believe you will
retire into a lower tax bracket, this VA may make sense for you. I don't
know how much switching they permit. There's much evidence that market
timing is a losing game, and that rebalancing in the 12-18 month range
is a better choice, but that's your decision and a different discussion.

JOE


Posted by kastnna on August 10, 2007, 12:37 pm
On Aug 10, 10:33 am, Percy.Labr...@Gmail.com wrote:
> Yes I have maximized all other vehicles available to me. This money
> is what is left over from that. It is important to note that I am NOT
> a "buy and hold" invetsor. Every so often, I make changes to the
> portfolio which would trigger capital gains taxes. That is why a VA
> works for me. I agree that for buy and holders it may not make that
> much sense to go with a VA.- Hide quoted text -
>

Good for you on the dedicated saving. You are already ahead of the
game. FWIW I am pro-VA, not anti. But as you clearly understand they
are only suitable for certain situations. Yours may well be one of
them.

My concern for you was the fine print of THIS PARTICULAR ANNUITY.
According Jeff Nat, "Certain funds also have a transaction fee ranging
from $19.99 to $49.99 per transaction, depending on the number of
transactions per year." Even for buy and hold investors that makes me
nervous (auto rebalancing usually counts as transactions), but for a
trader that can be murder.

Jeff Nat goes on to state, "the customer pays fees of the underlying
funds selected (currently ranging from 0.23% - 2.72%... plus the fees
of any advisor hired)" Check out:

http://www.jeffnat.com/aboutourfunds/annuityfundperformance.cfm?

If you plan on trading in the sector specific funds (biotech, int'l,
health, tech, banking, etc) you are going to see expense ratios on the
upper end of that range.

This may be the best VA for you, but it may not. I am just advising
that you look at all the costs, not just the $20/mo.


Posted by pal123 on August 10, 2007, 7:07 pm
wrote:

>On Aug 10, 10:33 am, Percy.Labr...@Gmail.com wrote:
>> Yes I have maximized all other vehicles available to me. This money
>> is what is left over from that. It is important to note that I am NOT
>> a "buy and hold" invetsor. Every so often, I make changes to the
>> portfolio which would trigger capital gains taxes. That is why a VA
>> works for me. I agree that for buy and holders it may not make that
>> much sense to go with a VA.- Hide quoted text -
>>
>
>Good for you on the dedicated saving. You are already ahead of the
>game. FWIW I am pro-VA, not anti. But as you clearly understand they
>are only suitable for certain situations. Yours may well be one of
>them.
>
>My concern for you was the fine print of THIS PARTICULAR ANNUITY.
>According Jeff Nat, "Certain funds also have a transaction fee ranging
>from $19.99 to $49.99 per transaction, depending on the number of
>transactions per year." Even for buy and hold investors that makes me
>nervous (auto rebalancing usually counts as transactions), but for a
>trader that can be murder.
>
>Jeff Nat goes on to state, "the customer pays fees of the underlying
>funds selected (currently ranging from 0.23% - 2.72%... plus the fees
>of any advisor hired)" Check out:
>
>http://www.jeffnat.com/aboutourfunds/annuityfundperformance.cfm?
>
>If you plan on trading in the sector specific funds (biotech, int'l,
>health, tech, banking, etc) you are going to see expense ratios on the
>upper end of that range.
>
>This may be the best VA for you, but it may not. I am just advising
>that you look at all the costs, not just the $20/mo.

Your points are well taken.


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for
a FEW lines to add context, the previous post is deleted.


Posted by Elle on August 13, 2007, 4:13 pm
> FWIW I am pro-VA, not anti.

Disclosure, please? Are you in any way involved in selling
VA products?

The NY Times printed an Op-Ed piece today on "bridge
maintenance." An engineer wrote it. In it, he commented:
"Recent technology advances include electronic sensors that
identify cracks and calculate the speed at which they are
spreading. (Disclosure: I'm an adviser to a company that
makes such a device.)"

That disclosure makes him more credible, not less, in my
mind, at least at first blush. For reputable publications,
such disclosures are customary, in the interests of
optimizing information dispersal to the public.


Posted by kastnna on August 13, 2007, 5:09 pm
>
> > FWIW I am pro-VA, not anti.
>
> Disclosure, please? Are you in any way involved in selling
> VA products?

Yes I do, though not often (they're are often not suitable).

> That disclosure makes him more credible, not less, in my
> mind, at least at first blush. For reputable publications,
> such disclosures are customary, in the interests of
> optimizing information dispersal to the public.

That's definitely one way of looking at it. Others will argue that I
sell them and I am therefore motivated to make people buy them even if
it's not in their best interest. I often feel it's lose-lose.

Back in 2006 you accused me of "generating a buzz" by recommending
ETFs during a asset allocation discussion so that I could sell more of
them (even though I have never given my name, location, etc.) So which
is it: generating a buzz or providing credibility?


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